Saga back in profit as it shrugs off the impact of Iran war
Over-50s travel and insurance group Saga has revealed a return to profit and forecast a further “step forward” in earnings over the year ahead, as it shrugged off Iran war disruption in the sector.
The group saw shares leap more than 10 per cent higher on Wednesday at one stage after it reported pre-tax profits of £2.1m for the year to January 31, against losses of £160.2m the previous year.
On an underlying basis, profits jumped 19 per cent higher and to £44.2m, helped by a 31 per cent surge in travel earnings to £14m.
The group said it was seeing limited impact from the Middle East conflict on its travel arm, with no cruise ship itineraries and only limited holidays bookings to Egypt, Cyprus and Turkey.
It said it had cancelled package holiday trips to Jordan, affecting less than 500 customers, but said bookings across its travel business had remained robust since the war started at the end of February.
Chief executive Mike Hazell told the Press Association on Wednesday that he was “not concerned about what we’re seeing” in terms of any effect on bookings, adding that the overall impact for the group is “small”.
He said around 75 per cent of its holiday programme for the year is already booked. “For the small proportion who haven’t booked their current holidays, then there will be some people waiting to see how this settles down, but we have plenty of options for them to travel to regions that aren’t affected,” Mr Hazell said.
The group added it was 100 per cent hedged for its fuel costs for the year to next March and 75 per cent hedged to the end of 2027.
Saga saw passenger numbers rise by 11 per cent in the past financial year as it focused on the needs of its target over-50s market, while it also brought all the travel divisions – ocean cruises, river cruises and package holidays – under one leadership team.
Saga said: “In Travel, we remain confident in driving continued success.
“While mindful of the current uncertainty in the Middle East, we have minimal exposure to the region.” The group said it remains “confident” in its aims to boost underlying annual profits to at least £100m by January 2030.
Saga has recently relaunched holidays in the UK for customers, with trips to historical cities such as Canterbury, Chichester and Falmouth.
Chairman Sir Roger De Haan, whose parents Sidney De Haan and Margery Crick founded Saga in 1951, said: “Travel is now the largest generator of profits in the group.
“Implementing a series of operational improvements and changes to our management structure led to increased customer numbers and improved customer satisfaction.”
“It is excellent that, after a number of years, we have started offering holidays in the UK again, the place our journey began 75 years ago,” he added.
Saga launched Saga Magazine and developed home and motor insurance and financial services in the 1980s.
Private medical and pet insurance followed in the 1990s, along with the launch of its own cruise ship operation.